Energy costs are barrier to growth

12:10am Monday 12th November 2012

By Andy Richardson

ENERGY costs are stifling growth across the North East, according to a study by the region’s largest business membership organisation.

Over a third of members responding to a North East Chamber of Commerce survey felt that the increase in costs were hampering recovery from recession, while almost two thirds of businesses said they were affected by rising transport fuel bills.

The findings have been released ahead of the publication of the Government’s Energy Bill, which will set out a legislative agenda aiming to support investment in the UK energy market in the coming years.

Unexpected increases in energy charges were also quoted by members as one of the main difficulties that businesses have faced with energy suppliers.

Key findings of the NECC Energy Survey:

35 per cent of businesses felt increasing costs impacted on business growth

64 per cent of respondents reporting that transport costs have increased significantly

23 per cent of respondents have received an unexpected increase in the last three years

76 per cent of respondents have some form of plan in place to manage their energy usage

44 per cent of respondents are aware of the Government’s Green Deal

55 per cent have experienced a disruption to their energy supply over the past three years

90 per cent think the UK should have a diverse energy mix

NECC policy advisor, Mark Stephenson, said: “Sluggish growth is rightly the number one issue in David Cameron’s in-tray at the moment. It is only right that anything seen to be stifling growth must be addressed.

“Core energy costs have increased for all businesses over the past three years. Equally worrying is the increasing volume and complexity of regulations affecting businesses generating or reliant upon large volumes of electricity. This is damaging North East and UK competitiveness.

“What is more, it has to be remembered that transport costs and fuel prices hit us in the North East particularly hard because we have further to travel to get to key markets in the UK and overseas.

“The North-East is an energy intensive region because it has thriving manufacturing and engineering sectors. Current policy is effectively punishing us, which is nonsensical given we are trying to rebalance away from an over-reliance upon the service sector.

“The Government must now seek to ensure that energy policy supports rather than punishes growth. It is also important that the Government recognises that awareness of its flagship Green Deal is worryingly low. More must to be done to support businesses seeking to lower energy costs and indeed their carbon footprint.”